The intracellular regulators cAMP, Ca 2+ and pH are involved in the initiation of sperm motility in the epididymis and regulation of mature sperm function. The actions of these mediators most likely involve changes in reversible phosphorylation of proteins involved in the regulation of sperm kinetic activity and metabolism. We have previously shown that the serine/threonine phosphatase, PP1, is present in sperm and that inhibition of this enzyme by okadaic acid and calyculin A results in motility initiation in immature sperm and motility stimulation in mature sperm. We demonstrated that the testis specific isoform PP1 2 and its heat stable protein inhibitor are present in sperm. In this report we have further characterized this inhibitor, determined how sperm PP1 is regulated, and how its in situ activity correlates with sperm motility. PP1 activity was measured with 32P-labeled phosphorylase `. I2 was measured by the ability of GSK-3 from sperm or rabbit muscle to activate the PP1-I2 complex in an ATP-dependent manner. In somatic cells, PP1 is inhibited by the heat stable inhibitors I1 and I2. I1 requires phosphorylation for its activity, whereas I2 does not. Most somatic cells contain I2 but no detectable I1. PP1 complexed with I2 (PP1I) is inactive and is activated by ATP-dependent activation by GSK-3. Sperm contain GSK-3-like activity as evidenced by the ability of sperm extracts to activate in vitro generated PP1I. A major proportion of the GSK-3 activity in caudal epididymal sperm is membrane-bound, whereas in caput sperm it is equally distributed between the membranes and the cytosol. Estimation of PP1 activity in caudal and caput epididymal sperm revealed that, depending on enzyme dilution in the assay, caput sperm contain 2- to 6-fold more PP1 activity than caudal epididymal sperm (n=12). The lower activity of PP1 in caudal sperm was due to a higher proportion of PP1I.